{{$store.state.data.search.serverData.config.placeholder}}

{{ vm.heading }}

{{ vm.closeTabLabel }}

Notice of updates
!

Since the last time you logged in our privacy statement has been updated. We want to ensure that you are kept up to date with any changes and as such would ask that you take a moment to review the changes. You will not continue to receive KPMG subscriptions until you accept the changes.

Hi
!

Our privacy policy has been updated since the last time you logged in

We want to make sure you're kept up to date. Please take a moment to review these changes. You will not receive KPMG subscription messages until you agree to the new policy.

Highlights

Also on KPMG.com

The Prime Minister has triggered Article 50, formally notifying the European Commission and other member states of the UK’s intention to leave the European Union. The two year period for any deal to be reached has begun.

So what does this mean for the energy sector?

The short answer is that nobody knows for sure how all this will pan out. But, there are some things wedo know and they are explored in this paper, covering topics including:

The UK leaving the Single Market

The prospects of reaching a new free trade agreement (FTA) on energy

What happens now

The UK is leaving the Single Market

The Prime Minister made clear in her speech on 17 January that the UK will be leaving the EU Single Market. Little has been said on energy explicitly, as it is not a top tier issue for the Brexit negotiations. But the implication is that the UK will also be out of the Internal Energy Market, since the rules governing how that market works are set out in European legislation (“the acquis”) and subject to the jurisdiction of the European Court of Justice (ECJ). The government has also said in the European Union (Notification of Withdrawal) Act that the UK will leave the Euratom Treaty, which governs the handling of nuclear fuels and nuclear waste across the EU.

The prospects of reaching a new FTA on energy

The logic of the UK Government’s position is that it will now need to negotiate a new FTA to ensure that harmonised tariff-free trading of gas and electricity can continue, we explore both the reasons to be optimistic and pessimistic.

What happens now

In the immediate term, the answer is “not much”, as the UK remains an EU Member State for now. However there are a number of things that industry and investors should be aware of.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.